CSR Ltd v Adecco (Australia) Pty Ltd

In the New South Wales Court of Appeal, CSR Limited and Holcim (Australia) Pty Limited (the hirers) appealed against a judgment concerning a dispute arising from an expired fixed-term labour supply contract with Adecco (Australia) Pty Ltd (the supplier). The dispute involved a claim by a worker injured at the hirers' premises and a cross-claim by the hirers against the supplier for contractual indemnity.

The primary legal issues before the Court of Appeal were whether an implied contract on the same terms as the expired fixed-term labour supply contract arose from the continued supply and payment of labour, and the proper construction of the contractual indemnity provisions within that implied contract. Specifically, the court had to determine if the conduct of the parties, including silence, indicated an intention for the relationship to continue on the terms of the expired contract, and if so, whether the indemnity clause covered the hirers' liabilities arising from the worker's injury.

The Court of Appeal reasoned that the conduct of the parties, particularly the continued supply and payment of labour after the expiry of the fixed-term contract, supported the inference of an implied contract on the same terms. The court applied the principle that a reasonable bystander would regard the parties' conduct as signalling their intention for the relationship to continue on the terms of the expired contract. The court further construed the indemnity clause strictly, finding that it was sufficiently broad to encompass the liabilities incurred by the hirers in relation to the injured worker's claim and associated costs.

Consequently, the appeal was allowed. The judgment in favour of Adecco (Australia) Pty Limited on the cross-claim was set aside, and judgment was entered for CSR Limited on the cross-claim. Adecco (Australia) Pty Limited was ordered to indemnify CSR Limited and Holcim (Australia) Pty Limited for various liabilities, including the judgment awarded to the plaintiff, costs associated with the plaintiff's claim and Adecco Industrial Pty Ltd's cross-claim, and their own defence costs. Adecco (Australia) Pty Limited was also ordered to pay the costs of the appeal and the proceedings below.